What: Weak signals on the art market are no good for the luxury industry.

Why is that important: any downturn in luxury will affect department store businesses, where the category has been a lifesaver so far.

Art collectors in Hong Kong recently faced hesitation from bidders, leading auction house Phillips to advise sellers to reduce prices. They mentioned at a summit that artworks, which once sold at thrice their auction estimates, are now fetching around half that.

Concurrently, luxury goods, closely linked to contemporary art, are seeing shifts. Shares of LVMH, which owns brands like Dior and Louis Vuitton, dropped by 7% after disclosing slowing sales. While LVMH still reported strong revenues, there was a deceleration in growth from 17% to 9%.

This could be a gentle sobering from post-pandemic consumption or a return to cyclical luxury spending. Factors like global conflicts and China's restrictions on wealth export also impact luxury and art sales.

Despite this, luxury brands still largely depend on the super-rich; a small shift in their purchasing habits can impact majorbrands. LVMH's Arnault remains optimistic about continued growth, but adapting to changing markets is crucial for both art and luxury sectors.

The art market might give a glimpse of what luxury retailers should expect